GM offering LTE in most 2015 vehicles; EU mandates eCall
As U.S. automaker General Motors gears up to make passenger vehicles a chief tech platform, the European Union is simultaneously moving to require all new cars sold there to be fitted with a wireless emergency calling device.
Speaking at the Chief Executives' Club of Boston, Dan Akerson, GM's chairman, described cars and trucks as the "next major technology platform" and said the company will offer LTE in most 2015 model-year vehicles sold in the United States and Canada, with sales beginning in mid 2014.
"Every brand we offer--from Chevrolet to Cadillac--and nearly every vehicle we sell around the world will soon offer 4G LTE, starting next year in the United States and Canada. It's a global rollout because that's what customers want--and we have the scale to deliver," he said, according to his prepared remarks.
In the United States, GM's new collaboration with AT&T (NYSE:T), which will provide LTE connectivity for the OnStar platform, will enable faster data download speeds to support infotainment services such as streaming video to vehicles, dealer-to-car communication, usage-based insurance and in-vehicle advertising, among other things.
Citi Investment Research analyst Itay Michaeli estimates that OnStar generates about $1.5 billion in annual revenue and close to a 35 percent profit margin for GM. He recently noted in an investor note that IHS Automotive predicts LTE enablement will lift OnStar's profit by $400 million in 2016 and $550 million in 2018.
Akerson observed that the average U.S. consumer spends 2 hours and 38 minutes per day on smartphones and tablets, which tops the 15 hours each week spent in cars as drivers or passengers. "Marry the two and you have a megatrend that we intend to harness for competitive advantage," he said.
GM has some 2,000 registered users on its developer.gm.com website, where the company is sharing remote and in-vehicle application interfaces with developers. Akerson predicted the GM App Shop, which will offer "4G-optimized programming for our cars," may someday be as popular as the application markets for Apple (NASDAQ:AAPL) devices and Google (NASDAQ:GOOG) Android devices.
Across the pond, meanwhile, draft legislation introduced in the European Union calls for all new cars in the European Union to be fitted with an eCall device beginning in October 2015. The device would automatically dial Europe's 112 emergency number in the event of an accident, sending the time of the incident and location information to the nearest emergency call center.
The European Commission emphasized that travel data would not be monitored or stored, noting the eCall device will remain dormant until automatically activated by an accident or a vehicle occupant manually switching it on.
"It is not traceable and when there is no emergency (its normal operational status) it is not subject to any constant tracking. As it is not permanently connected to mobile networks, hackers cannot take control of it," said the commission.
Proprietary systems can still be used under the proposal but must enable an automatic transfer to the 112 eCall system if the proprietary system is not operational.
The European Automobile Manufacturers' Association (ACEA) welcomed the legislative proposal on eCall. However, ACEA noted that other stakeholders must uphold their commitments to the technology, meaning "public service answering points (PSAPs) must be ready in all member states, and mobile network operators need to be prepared before in-vehicle systems are enforced."
The group noted that the current proposal does not specify the eCall system's precise technical requirements, which would be expected in a subsequent Delegated Act in 2014.
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